Gasoline, food prices seen lifting inflation in June

Rising gasoline and food prices likely drove an increase in consumer prices in June, according to economist forecasts.

Economists polled by MarketWatch expect the government to report Tuesday morning that the consumer-price index rose 0.3% in June. A 0.3% rise would be slower than 0.4% in the prior month, but higher than an average monthly gain of 0.2% over the year through May, according to the Bureau of Labor Statistics. Stripping out volatile food and energy categories, economists expect this core reading to show inflation of 0.2% in June, compared with 0.3% in May.

The CPI has climbed from as low as 1.1% year-on-year in February to 2.1% in May. Federal Reserve Chairwoman Janet Yellen has described the increase as “noisy.” The Fed’s favored gauge of inflation – the Bureau of Economic Analysis’s personal-consumption-expenditures index – has also shown a substantial pickup in recent months, with annual inflation hitting 1.8% in May, compared with 0.8% in February.

BLS will release the inflation data at 8:30 a.m. Eastern.

Later Tuesday morning, the National Association of Realtors will report on existing-home sales, and economists expect an annual rate of 5 million for June, compared with a 4.89 million pace in May. At least three factors are working in favor of home sales: mortgage rates have trended down since the year started, home-price growth is cooling off and there are more properties available for sale.

However, economists still expect existing-home sales for all of 2014 will wind up below last year’s final tally, pulled lower by a weak first quarter.